The rise and fall of foreign private investment in the jatropha biofuel value chain in Ghana

The article draws on the multi-level perspective (MLP) and
global value chain (GVC) frameworks to analyse the drivers and
trajectories of foreign private investment in biofuel production in
Ghana. It is based on a narrative of the evolution of a niche for
jatropha production in Ghana in the period 1995 – 2016 including company
case studies. The factors analysed relating to MLP are alignment of
expectations, network formation, and learning and knowledge sharing, and
those relating to GVC are chain structure, governance, ownership, and
access to land and capital. High entry barriers for creating a new
agriculture-based value chain for global biofuel markets, i.e. high
volume requirements, high capital needs, and market risks contributed to
the collapse of the jatropha sector in Ghana. A low level of learning and
knowledge sharing between jatropha actors in Ghana, alongside weak public
R&D support, reduced access to technical and managerial information.
Confirming previous GVC research on biofuels, policy and NGOs had a
stronger influence on the jatropha value chain than in typical
agricultural chains. Moreover, global drivers and the strategies and
capabilities of foreign investors can strongly influence the development
of a new biofuel value chain in a developing country. The latter points
complement previous research on jatropha, which highlights politicoeconomic
factors such as land tenure, regional and local power relations,
and the interests of donors and NGOs. The study exemplifies a nonevolutionary
niche development that goes beyond the European experiences
of industrial niche development on which the MLP framework was first
established. The importance of investors and policy at different levels
of the value chain illustrate the synergies in combining the MLP and GVC
frameworks in research on energy transitions in developing countries.

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